R v The Secretary of State for the Environment, ex p. Ostler

Factual and Procedural Background

The case concerns the compulsory purchase and construction of a relief road in the town of Boston. The project was initiated in 1965, with land acquisition beginning in 1972 in two stages: first for the trunk road itself, then for side roads providing access. Public inquiries were held for each stage.

At the first inquiry in September 1973, a company ("Company A") objected on the basis that access to their yards would be cut off. It was alleged that a secret assurance was given by a government officer that access would be maintained via a narrow lane ("Craythorne Lane"), which would be widened in the second stage. On receiving this assurance, Company A withdrew its objection. This assurance was not publicly disclosed.

A corn merchant ("Plaintiff") had premises near Craythorne Lane but was unaware of the proposed widening. Believing the lane would remain narrow, the Plaintiff did not object at the first inquiry. The first stage was approved, and orders for compulsory purchase and road construction were made in early 1974.

In July 1974, a supplementary order was made to widen Craythorne Lane, which the Plaintiff opposed, fearing harm to his business. A second inquiry was held in December 1974, where the Plaintiff gave evidence but was not allowed to refer to the secret assurance or the first inquiry's history. The Minister confirmed the order in July 1975.

After learning of the secret assurance, the Plaintiff applied in December 1975 to quash the earlier orders from 1974, alleging lack of natural justice and bad faith. The Divisional Court considered whether the authority of the precedent case Smith v. East Elloe remained good law or had been overruled by Anisminic v. Foreign Compensation Commission. They suggested further evidence was needed on the secret agreement and alleged bad faith, but the government appealed to the Court of Appeal.

By the time of appeal, significant progress had been made: 80% of land acquired and 90% of buildings demolished. The Plaintiff sought to overturn orders nearly two years old, despite statutory provisions requiring challenges to be made within six weeks of notice publication.

Legal Issues Presented

1. Whether the precedent established in Smith v. East Elloe remains good law or has been overruled by the later Anisminic v. Foreign Compensation Commission decision.
2. Whether the Plaintiff’s challenge to the compulsory purchase orders, based on alleged bad faith and lack of natural justice, is barred by the statutory six-week limitation period.
3. The extent to which an administrative order, such as a compulsory purchase order, can be challenged on grounds of fraud or mala fides after the expiry of a statutory time limit.

Arguments of the Parties

Appellant's Arguments

• The statutory provisions in the Highways Act 1959 require challenges to compulsory purchase orders to be made within six weeks of notice publication.
• The precedent in Smith v. East Elloe establishes that challenges on grounds including bad faith must be brought promptly and are barred thereafter.
• Allowing the Plaintiff’s late challenge would cause undue delay and disrupt significant public works already underway.
• The case is distinguishable from Anisminic because that case involved a judicial tribunal and an absolute ouster of jurisdiction, whereas this involves an administrative decision subject to a limitation period.

Respondent's Arguments

• The Plaintiff alleges a secret agreement and bad faith, which if proven, should allow the challenge despite the time limit.
• The Plaintiff was prevented from raising relevant evidence at the second inquiry, undermining procedural fairness.
• The case law, particularly Anisminic, may undermine the absolute effect of the statutory time limit in cases of bad faith or fraud.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court began by outlining the factual background and the procedural history of the compulsory purchase orders and the subsequent inquiries. The central legal question was whether the Plaintiff’s late challenge to the earlier compulsory purchase orders could be entertained despite the statutory six-week limitation period.

The Court analysed the statutory provisions in the Highways Act 1959, which require any challenge to be made within six weeks of notice publication. It noted that while the statutory language appears to restrict challenges to ultra vires or procedural non-compliance grounds, case law has extended this to include bad faith and lack of natural justice.

The Court reaffirmed the binding authority of Smith v. East Elloe, which holds that compulsory purchase orders become final and immune from challenge after the statutory time limit, even if there is an allegation of fraud or bad faith. The Court found that such orders are not nullities but voidable, and if not promptly challenged, remain effective.

The Court distinguished Anisminic on several grounds: (1) Anisminic involved an absolute ouster of jurisdiction and a judicial tribunal, whereas this case involves a limitation period and an administrative decision; (2) The nature of the decision in this case involves public interest considerations, unlike the purely judicial determination in Anisminic; and (3) Anisminic concerned the validity of the tribunal’s determination itself, while this case concerns the validity of the process by which an administrative order was made.

The Court concluded that the statutory time limit must be strictly enforced to protect public interest, especially given the substantial progress in the project. Allowing late challenges would cause unacceptable delays and undermine the certainty of administrative decisions.

All Judges agreed that the Plaintiff’s challenge was barred by the statutory provisions and that the appeal should be allowed.

Holding and Implications

The Court allowed the appeal and dismissed the Plaintiff’s application for certiorari.

The direct effect of this decision is that the Plaintiff is barred from challenging the compulsory purchase orders made in 1974, due to failure to comply with the six-week statutory limitation period. The Court confirmed that administrative orders of this nature are final and binding after the expiry of the prescribed time, even if there are allegations of bad faith or lack of natural justice.

No new precedent was set; rather, the Court reaffirmed the existing authority of Smith v. East Elloe as the governing law. The ruling underscores the importance of prompt legal challenges to administrative decisions affecting property rights and balances private interests against the public interest in certainty and finality of public works.